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CONFIDENTIAL         27 

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641™^|^SS}        SENATE  COMMITTEE   PRINT. 

5 

33i 

570  CESSION  OF  THE  DANISH  WEST  INDIES. 


UETT-ER  FROM  THE  SECRETARY  OF  STATE  TO  THE  CHAIRMAN  O# 
THE  COMMITTEE  ON  FOREIGN  RELATIONS  TRANSMITTING  A 
SUMMARY  MEMORANDUM  RELATIVE  TO  CERTAIN  ARTICLES  OP 
THE  PROPOSED  TREATY  WITH  DENMARK  CEDING  TO  THE  UNITED 

=     STATES  THE  DANISH  WEST  INDIES. 


Printed  in  confidence  for  the  use  of  the  Committee  on  Foreign  Relations. 


DEPARTMENT  OF  STATE, 
I  Washington,  August  22,  1916. 

MY  DEAR  SENATOR  STONE:  I  have  received  your  memorandum 
requesting  further  information  in  regard  to  the  following  articles  of 
the  proposed  treaty  with  Denmark  ceding  to  the  United  States  the 
Danish  West  India  Islands:  Article  2,  article  3,  article  6,  article  8 
(clause  3),  article  9,  and  article  10. 

In  reply,  I  have  had  prepared  and  inclose  herewith  a  summary 
memorandum  which,  I  believe,  contains  the  information  that  you 
desire.  If  I  can  be  of  further  assistance  to  you  or  can  furnish  you 
with  any  copies  of  the  original  documents  from  which  the  inclosed 
memorandum  was  compiled,  I  shall,  as  you  know,  be  very  glad  to 
do  so. 

I  am,  my  dear  Mr.  Senator, 
Very  truly,  yours, 

KOBERT  LANSING, 
Hon.  WILLIAM  J.  STONE, 

United  States  Senate. 

UNIVERSITY  OF  CALIFORNIA 
LOS 


SEP  5     1969 

LIBRAR* 
GOVT.  PUBS.  SERV. 


TREATY  CEDING  DANISH  WEST  INDIES  TO  THE  UNITED  STATES, 

SUMMARY  MEMORANDUM. 
ARTICLE    II. 

In  regard  to  the  last  paragraph  of  this  article,  the  American  min- 
ister in  Copenhagen  telegraphs  the  following  note  which  he  has  re- 
ceived on  this  point  from  the  minister  of  foreign  affairs : 

[Paraphrase.] 

The  churches  in  the  Danish  West  India  Islands  belonging  to  the  Established  Church, 
are  owned  by  the  Danish  State,  and  the  expenses  connected  with  their  maintenance 
and  repairs  are  appropriated  for  in  the  annual  budgets.  An  exception  to  this  is  the 
church  on  Kings  Hill,  which  was  built  by  an  association  in  this  country,  now  the 
West  India  Church  Union.  This  union  still  owns  the  church  and  keeps  it  in  repair, 
but  the  Danish  State  defrays  the  stipend  to  the  clergymen  appointed  to  this  church. 

The  endowments,  if  any,  bestowed  on  the  churches,  are  not  comprised  in  the  an- 
nual estimate  of  income  and  expenditure  of  the  Danish  State,  in  consequence  of 
which  no  mention  is  made  therein  of  their  amounts.  They  must,  however,  be  sup- 
posed to  belong  to  the  congregations  of  the  churches  concerned.  The  congregations, 
through  their  vestries,  decide  upon  the  application  of  these  resources.  The  said  re- 
sources are  not  considered  to  be  very  large. 

The  control  of  said  resources  is  exercised  by  the  congregation  concerned,  and  each 
congregation  decides  the  manner  in  which  this  control  is  to  be  exercised. 

As  Article  II  reserves  to  the  congregations  merely  the  use  of  the 
churches,  parsonages,  and  funds,  it  seems  clear  that  the  United  States 
Government  is  not  obligated  by  this  article  to  continue  the  appro- 
priations which  Denmark  has  heretofore  made  for  the  maintenance 
and  repairs  of  the  properties  and  the  salaries  of  the  clergymen;  and 
that  there  would  be  no  obligation  upon  the  United  States  Govern- 
ment to  appropriate  additional  sums  toward  the  maintenance  of  the 
"funds,"  to  take  title  to  these  funds,  or  to  take  part  in  their  dis- 
pensation. Department  is  making  efforts  to  procure  further  particu- 
lars in  regard  to  these  matters  at  the  earliest  moment. 
"  It  may  be  stated  that  in  the  negotiations  for  the  treaty  of  1902,  the 
Danish  Government  appeared  to  regard  such  funds  as  not  belonging 
to  the  Danish  State  and  therefore  not  passing  to  the  United  States  if 
inserted  in  that  treaty.  The  church  properties,  however  (three  in 
number),  of  the  Established  Church  being  owned  by  the  Danish 
State,  will  pass  to  the  United  States  under  the  proposed  treaty,  but 
there  appears  to  be  nothing  in  the  treaty  to  prevent  the  transfer  of 
the  churches  and  church  properties  to  the  congregations  for  their 

ARTICLE    III. 

I 

*fl)  This  provision  is  taken  from  Article  II  of  the  unratified  treaty 
et  1902,  with  which  it  is  practically  identical. 

(2)  This  provision  is  new  and  appears  to  be  chiefly  of  sentimental 
significance. 
2 


CESSION    OF    THE    DANISH    WEST    INDIES.  3 

(3)  The  exact  amount  of  the  pecuniary  claims,  if  any,  held  by 
Denmark  against  the  colonial  treasuries  of  the  islands  has  not  been 
calculated,  but  whatever  they  are  the  United  States  assumes,  with 
one  exception,  no  responsibility  in  regard  to  them.     A  somewhat 
similar  provision  occurred  in  Article  I  of  the  treaty  of  1902,  but 
without  the  exception  mentioned  in  this  article.     Under  this  excep- 
tion whatever  current  amount  may  be  found  due  the  Danish  treasury 
in  settlement  of  the  accounts  of  the  West  Indies  of  the  present  year 
up  to  the  date  of  the  cession  of  the  islands  is  to  be  paid  to  the  Danish 
treasury.     From  the  Government  account  of  1914-15  it  appears,  as 

.  the  Danish  Government  states,  that  on  March  31,  1915,  it  had  to  its 
credit  in  the  West  Indies  treasuries  the  sum  of  79,671.60  kronen 
and  a  cash  balance  of  110,902.16  kronen.  The  article  provides  that 
if  there  is  a  balance  in  favor  of  the  colonial  treasuries  the  Danish 
treasury  shall  pay  that  amount  to  the  -colonial  treasuries. 

(4)  The  following  grants,  concessions,  etc.,  are  the  only  ones  in 
regard  to  which  the  United  States  assumes  the  obligations  of  the 
Danish  Government.     In  the  same  way  the  1902  treaty  assumed  the 
obligations  of  the  Danish  Government  in  respect  to  the  floating  dock 
concession  and  the  West  India  and  Panama  telegraph  concession, 
but  excepted  the  sugar  boileries  concession.     So  far  as  we  know, 
there  were  no  other  concessions  then  in  existence.     The  sugar  boil- 
eries concession  has  been  closed  up,  as  the  Danish  Government  states, 
by  the  law  of  April  24,  1903,  providing  a  means  of  settlement  satis- 
factory to  the  shareholders,  and  the  St.  Thomas  colonial  treasuries. 
The  assumption  of  the  obligations  in  connection  with  the  following 
concessions  is  regarded  by  Denmark  as  an  essential  part  of  the  con- 
sideration for  the  cession,  and  as  justly  due  to  the  business  interests 
of  the  islands,  which  are  naturally  apprehensive  as  to  the  conse- 
quences attendant  upon  a  transfer  of  sovereignty  to  the  United 
States.     A  brief  summary  of  the  sugar  boileries  concession  and  its 
settlement  is  given  at  the  end  of  the  following  concessions. 

(4a)  St.  Thomas  Harbor  improvement. — On  July  7,  1912,  by  royal 
decree  under  the  law  of  May  25,  1912,  the  right  was  granted  to  a  con- 
sortium for  99  years  to  dam  in  the  areas  in  St.  Thomas  Harbor 
marked  in  red  on  a  plan  annexed  to' the  concession;  to  reclaim  these 
areas,  and  to  own  exclusively  the  areas  reclaimed,  except  for  con- 
flicting private  rights  which  might  be  expropriated;  and  to  have  the 
exclusive  right  to  utilize  the  basins  constructed  (dredged)  marked 
in  blue  on  the  same  plan;  to  charge  wharf  age,  warehousage,  and  stake 
dues  alike  on  all  vessels  which  use  these  facilities;  to  construct  a 
mole  to  St.  Rupperts  Rocks  to  be  utilized  in  the  same  way;  to  con- 
struct and  operate  one  or  more  floating  docks,  than  which  no  permit 
for  the  operation  of  another  floating  dock  will  be  granted.  The  fore- 
going grants  were  to  be  free  from  competition  save  for  existing  grants, 
and  rights  needing  no  concession  for  their  exercise.  Concessionaire 
has  right  to  erect  tanks  for  liquid  fuel  for  ships  on  these  areas,  right 
to  give  pilot  service  for  the  harbor,  erect  lighthouses,  free  importation 
of  his  building  materials,  etc.  The  usual  pilot  and  harbor  dues,  how- 
ever, shall  be  paid  into  the  harbor  treasury  according  to  the  prevail- 
ing rates.  Government  had  right  to  buy  up  concession  at  end  of  60, 
70,  80,  and  90  years  from  date  of  completion  of  certain  works,  and 
also  at  expiration  of  concession  at  appraised  value.  Company  had 
the  preferential  right  to  establish  electric  light  and  power  plant, 


4  CESSION    OF    THE    DANISH    WEST    INDIES. 

refrigerating  plant,  waterworks,  street  car  power  house,  wireless  sta- 
tions, etc.,  on  St.  Thomas;  and  various  other  rights.  This  concession 
was  totally  annulled  January  31,  1913* 

After  it  hecame  known  that  it  would  be  unable  to  carry  out  the 
terms  of  the  concession  of  July  7,  the  West  India  Co.,  on  January 
6,  1913,  requested  the  transfer  to  it  of  the  more  limited  privileges 
granted  to  the  consortium  for  the  drainage  and  deepening  of  an  area 
within  St.  Thomas  Harbor  mentioned  in  letters  of  the  minister  of 
finance,  dated  October  2,  11,  and  14,  1912,  to  the  consortium.  In 
reply,  January  18,  1913,  the  minister  of  finance  granted  to  a  new 
company,  with  a  domicile  in  Copenhagen,  and  the  majority  of  the 
board  of  directors,  Danish  subjects,  permission  "to  embank  the  areas 
in  St.  Thomas  Harbor  which  are  marked  in  red  on  the  plan  which 
accompanied  the  concession  of  July  7  of  last  year  *  *  *  so  that 
when  these  land  areas  are  reclaimed  the  company  shall  have  free 
and  unrestricted  ownership  thereof,"  subject  to  private  rights,  and 
granted  "the  exclusive  right  to  utilize  the  basins  dredged  according 
to  the  aforementioned  plan,"  and  authorizes  company  "to  charge 
wharfage,  stake  dues,  and  other  similar  dues  from  vessels  which  come 
up  to  tne  wharves  or  otherwise  utilize  the  basins  *  *  *  accord- 
ing to  previously  fixed  rates  which  must  be  uniform  to  all,"  and 
gave  permission  "to  erect  tanks  for  liquid  fuel  for  ships  on  the  area 
belonging  to  it"  subject  to  certain  safety  restrictions.  Pilotage  and 
harbor  dues,  however,  are  to  be  paid  into  the  harbor  treasury  by 
ships  coming  into  the  harbor  and  using  the  facilities  constructed  by 
the  company.  The  minister  referred  to  the  law  of  January  1,  1913, 
giving  the  Government  the  right  by  decree  to  exempt  from  customs 
duties  and  harbor  dues  for  10  years  from  January  1,  1913,  all  mate- 
rials imported  into  St.  Thomas  for  the  installation  there  of  considered 
plants  intended  to  supply  or  serve  ships  entering  the  harbor,  or  which 
are  otherwise  calculated  to  further  navigation  in  the  harbor.  On 
April  1,  1913,  a  decree  was  issued  putting  this  law  into  effect.  By 
letter  of  April  16,  1913,  the  minister  of  finance  informed  the  com- 
pany that  the  plans  for  the  extension  of  the  present  area  of  St. 
Thomas  Harbor  by  making  Gregorie  and  the  two  Gregori  Canals 
part  of  the  harbor,  would  not  be  carried  out,  because  the  company 
regarded  them  as  threatening  to  its  purposes  and  future.  The 
minister  of  finance  expressed  himself  as  ' '  ready  to  give  his  permission 
that,  within  a  certain  period  (regarding  which  we  would  ask  the 
company  for  a  suggestion)  and  provided  that  the  company's  estab- 
lishment proves  adequate  to  attend  to  the  expected  increased  traffic, 
we  will  not  give  any  other  companies  any  concessions  for  com- 
mercial, industrial,  or  navigational  establishment  in  St.  Thomas 
Harbor."  The  department  is  informed  that  this  concession  is  with- 
out monoply  or  promise  of  monopoly.  The  Danish  Government 
states  that  period  within  which  other  companies  should  not  be 
granted  concessions  in  St.  Thomas  Harbor  was  never  agreed  upon, 
and  that  the  letters  of  January  18,  1913,  and  April  16,  1913,  men- 
tioned above,  set  forth  all  of  the  rights  of  the  West  India  Co. 

(4b)  Agreement  between  communes  of  St.  Thomas  and  St.  Jan  and 
the  West  Indies  Co.  to  furnish  the  city  of  Charlotte  Amalie  with  electric 
light. — On  August  10  and  14.  1914,  the  minister  of  finance  of  Den- 
mark, apparently  in  behalf  of  the  communes  of  St.  Thomas  arid  St. 
Jan,  entered  into  an  agreement  with  the  West  Inches  Co.,  whereby 


CESSION   OF    THE   DANISH   WEST   INDIES.  5 

the  latter  undertook  from  April  1,  1915,  under  certain  conditions,  to 
light  the  streets  of  Charlotte  Amalie  with  electric  lights  and  to  fur- 
nish other  current  to  private  persons  and  the  public.  After  10 
years,  if  the  commune  desires  to  take  over  the  lighting  system,  or 
if  the  company  desires  to  become  free  from  its  obligation,  the  com- 
mune may  then  take  over  the  system  upon  the  payment  of  a  sum 
equal  to  the  capital  invested,  less  a  deduction  of  5  per  cent  at  the 
end  of  each  calendar  year.  The  company  agrees  to  comply  at  all 
times  with  the  laws  and  regulations  in  force  in  regard  to  establish- 
ments of  this  kind.  (Contract  of  Aug.  10  and  14,  1915.) 

(4c)  Floating  dock  in  St.  Thomas  Harbor. — Royal  decree  of  Feb- 
ruary 2,  1897,  authorized  the  Government  of  the  West  Indian  Islands 
to  grant  a  concession  for  the  exploitation  of  an  iron  floating  dock  in 
St.  Thomas  Harbor  for  21  years  to  the  "Floating  Dock  Co.  of  St. 
Thomas  (Ltd.)."  On  March  12,  1897,  the  West  Indian  Government 
granted  the  concession  for  a  period  of  21  years  from  March  12,  1897, 
to  "Floating  Dock  Co.  of  St.  Thomas  (Ltd.)."  Later  it  was  trans- 
ferred to  the  St.  Thomas  Dock,  Engineering  &  Coaling  Co.  (Ltd.). 
The  proposed  dock  was  to  be  250  by  70  feet,  with  a  capacity  of  3,000 
English  tons.  Company  is  to  fix  its  own  rules  and  fees  for  use  of 
dock  so  long  as  they  do  not  interfere  with  order  and  security  in  the 
harbor,  and  apply  to  vessels  of  all  nations  alike.-  Danish  warships 
and  mail  ships  of  all  nations  have  the  preferential  right  to  use  the 
dock.  If  there  is  no  neglect  in  keeping  the  dock  in  a  usable  condi- 
tion, the  Danish  Government  will  not  permit  any  other  floating  dock 
in  the  St.  Thomas  Harbor  for  vessels  over  200  tons,  but  the  concession 
does  not  affect  the  floating  dock  already  existing  or  its  improvement. 
If  defects  hindering  the  use  of  the  dock  are  not  remedied  within  a 
period  to  be  set  by  referees,  unless  there  is  no  negligence,  the  con- 
cession may  be  forfeited.  The  company  may  not  move  its  dock 
away  from  the  island  unless  it  has  failed  to  yield  any  profit  for  three 
consecutive  years.  Interpretation  of  concession  rests  with  the 
Government.  (Ministry  of  finance,  Feb.  19,  1901;  original  conces- 
sion papers.) 

(4d)  West  India  &  Panama  Telegraph  Co.  (Ltd.). — By  royal  decree 
of  November  30,  1914,  the  yearly  subsidy  hitherto  granted  to  the 
company,  amounting  to  15,000  francs,  from  the  St.  Thomas  colonial 
treasury,  and  5,000  francs  from  the  St.  Croix  colonial  treasury,  was 
insured  to  the  company  for  a  period  of  10  years  from  April  1,  1915, 
on  conditions  mentioned  in  the  decree  of  November  2,  1885,  provided 
the  company  maintains  throughout  said  period  the  maximum  prices 
for  the  transmission  of  telegrams  stated  in  the  decree.  The  decree 
also  insured  the  company  against  competition  from  any  other  cable 
company  for  the  same  period  of  10  years  (but  the  existing  line  on 
St.  Thomas  belonging  to  another  company  may  be  used  whenever 
the  connections  of  the  West  India  &  Panama  Co.  are  interrupted  or 
deranged).  The  decree  reserved  to  the  Government  the  privilege  to 
grant  concessions  for  wireless  telegraphy.  The  company  is  subject  to 
the  decree  of  April  18,  1910,  regarding  telegraphs  in  the  Danish  West 
India  Islands. 

(4e)  Concession  to  K.  B.  Hey  for  telephone  system  on  St.  Thomas 
Island. — By  royal  decree  of  September  18,  1906,  and  grant  thereunder 
of  the  governor  of  the  Danish  West  Indies,  of  November  3,  1906, 


6  CESSION    OF    THE    DANISH    WEST    INDIES. 

K.  B.  Hey  was  given  the  exclusive  privilege  to  establish  and  operate 
telephones  on  St.  Thomas  Island  for  a  period  of  20  years  from  Novem- 
ber 3,  1906,  subject  to  the  right  of  the  commune  to  take  over  the 
plant  and  concession  upon  the  payment  of  indemnity.  The  con- 
cession was  later  transferred  to  "  St.  Thomas  Telephone  Co."  This 
concession  excepts  telephone  systems  exclusively  used  by  the  com- 
mune or  communal  institutions,  and  under  certain  conditions  private 
individual  systems.  The  concessionaire  is  not  obliged  "  to  pay  any- 
thing to  the  commune  except  such  indemnities  as  may  be  due  the 
commune "  for  damages,  etc.  There  are  restrictions  regarding 
access  to  private  property. 

The  Government  reserved  the  following  rights: 

To  fix  the  maximum  rates; 

To  require  extensions  and  improvements; 

To  prescribe  with  respect  to  the  operation  of  the  plant; 

To  require  explanations  about  the  plant  and  to  have  access  thereto; 

To  prescribe  rules  and  conditions  for  connecting  with  telegraph  companies; 

To  approve  in  certain  cases  resort  to  proceedings  to  install  on  private  property  and 
to  determine  compensation  therefor; 

To  prescribe  conditions  for  the  acceptance  of  subscribers,  if  circumstances  warrant; 

To  determine  disputes  with  other  electric  lines  (telegraph,  lighting,  etc.)  as  to 
right  of  way,  etc. 

To  consent  to  complaints  of  violations  of  the  provisions  of  the  concession,  punish- 
able by  fine; 

To  supervise  the  installations  and  their  operations; 

To  decide  upon  complaints  by  the  public  regarding  the  attitude  of  the  concessionaire 
or  his  employees 

To  determine  further  rules  for  supervision  over  the  concessionaire; 

To  approve  bonds  given  by  employees,  not  to  divulge  information,  etc.; 

To  demand  the  discharge  of  employees  who  have  committed  such  acts,  which  are 
described ; 

To  declare  the  concession  forfeited  if  the  concessionaire  fails  to  comply  with  instruc- 
tions lawfully  given  by  the  Government,  or  if  he  fails  without  necessity  to  operate  the 
system;  in  either  case  the  Government  may  operate  the  system; 

To  impose  a  fine  not  over  500  francs  upon  the  concessionaire  for  violations  of  the 
concession;  and 

To  construe  the  meaning  of  the  concession. 

The  concession  provides  that  the  grant  shall  not  be  transferred  or 
leased  to  any  other  party  without  consent  of  the  "Government  for 
the  Danish  West  Indies."  (Governor's  grant  of  Nov.  3,  1906.) 

(4f)  Grant  to  the  St.  Croix  commune  to  establish  and  operate  tele- 
phones on  St.  Croix  Island. — In  pursuance  of  authority  in  ordinance 
No.  30  of  August  21,  1908,  the  governor  of  the  Danish  West  Indies 
granted  on  February  28,  1913,  to  the  municipality  of  St.  Croix,  an 
exclusive  concession  to  establish  and  operate  telephones  in  St.  Croix 
Island  for  20  years  from  February  28,  1913,  upon  certain  conditions, 
and  subject  to  the  laws  and  regulations  relative  to  telephones. 
Government  owned  and  certain  private  telephones  are  excepted,  but 
otherwise  any  telephone  lines  erected  may  be  confiscated,  and  owners 
fined,  but  complaint  can  only  be  entered  at  the  request  of  the  Gov- 
ernment. Passage  over  or  under  private  property  is  regulated,  pro- 
vision is  made  for  indemnifying  damages.  A  bond  is  required  of 
employees  not  to  divulge  information  from  the  telephones.  Em- 
ployees divulging  such  information  are  subject  to  fine  and  dismissal* 
There  is  a  provision  for  the  concessionaire  to  take  over  the  telegraph 
system  of  St.  Croix.  The  concession  shall  not  be  transferred  or 
leased  without  the  consent  of  the  Government  of  the  Danish  West 
Indian  Islands.  There  is  a  provision  that  the  concession  can  be 


CESSION    OF    THE    DANISH    WEST    INDIES.  7 

declared  forfeited  by  the  Government  if  the  concessionaire  does  not 
within  the  time  allotted  by  the  Government  comply  with  its  lawful 
orders.  The  concession  is  to  be  interpreted  by  the  Government. 
(Governor's  decree,  Feb.  28,  1913.) 

(4g)  Concession  to  Einar  Svendsenjor  electric  plant  in  Christiansted, 
St.  Croix. — On  July  16,  1915,  the  minister  of  finance  granted  to  Einar 
Svendsen  a  nonexclusive  concession  for  the  establishment  and  opera- 
tion of  an  electric  plant  for  the  supply  of  electric  light  to  Christian- 
sted,  St.  Croix.  The  remaining  specifications  for  the  execution  of 
the  concession  are  to  be  determined  by  the  Government  of  the 
Danish  West  Indies.  (Concession  and  letter  of  minister  of  finance, 
July  16,  1915.) 

(4h)  Concession,  for  the  establishment  of  the  Danish  West  Indian 
Bank  of  Issue. — Acting  under  the  Danish  law  of  March  29, 1904,  the 
minister  of  finance  on  June  20,  1904,  granted  a  concession  for  a  period 
of  30  years  to  a  group  of  banks  consisting  of  the  National  Bank  of 
Copenhagen,  the  Trivate  Bank  of  Copenhagen,  the  Danish  Farmers 
Bank,  the  Mortgage  and  Exchange  Bank,  and  the  Copenhagen  Com- 
mercial Bank,  for  the  establishment  in  the  Danish  West  Indies  of  a 
joint-stock  bank  under  the  name  of  the  Danish  West  Indian  Bank  of 
Issue,  which  will  have  for  its  object  the  promotion  of  the  economic 
development  of  the  islands,  and  which  shall  have  the  sole  right  for 
30  years,  upon  showing  specified  specie  reserve  and  realizable  assets,  to 
issue  notes  which  shall  be  legal  tender  and  exchangeable  by  the  holder 
upon  demand  for  gold  coin.  If  the  bank  becomes  unable  to  fulfill 
its  obligations,  the  concession  shall  be  forfeited. 

The  capital  stock  was  5,000,000  francs,  at  least  one-quarter  to  be 
paid  in  cash,  the  remainder  to  be  covered  by  certificates  of  guaranty 
of  the  four  banks  composing  the  group,  which  are  to  be  deposited 
with  the  minister  of  finance.  The  minister  of  finance,  when  he  deems 
it  necessary  to  fulfill  the  obligations  of  the  bank,  may  require  further 
cash  payments  on  the  capital  stock,  in  which  case  the  certificates  of 
guaranty  shall  be  credited  with  the  corresponding  amount.  The 
Danish  Government  or  the  minister  of  finance  reserve  the  right  to 
consent  to  an  increase  of  the  capital  stock;  to  call  in  the  old  Danish 
West  India  bills  of  credit  of  1849  within  a  certain  period  (Apr.  30, 
1907) ;  to  prescribe  rules  for  loan  business;  to  choose  two  of  the  seven 
members  of  the  bank  council  and  one  substitute  member;  to  set  aside 
resolutions  of  the  council  contrary  to  the  by-laws;  to  appoint  one  of 
the  two  auditors  of  the  bank;  to  prescribe  rules  to  govern  the  auditors' 
supervision  of  the  bank;  to  determine  the  by-laws  of  the  bank;  to 
withdraw  or  restrict  the  right  to  issue  notes,  in  which  case  the  bank 
is  entitled  to  demand  that  the  Government  take  over  the  bank,  the 
assets  and  liabilities  of  the  bank,  and  redeem  the  capital  stock  at  par  plus 
the  amount  of  profits  received  by  stockholders  over  4  per  cent  per 
annum,  but  in  no  case  over  125  percent;  and  to  construe  the  meaning 
of  the  concession. 

The  by-laws  further  reserve  to  the  minister  of  finance  or  the 
Government  the  right  to  approve  the  form  and  denomination  of  the 
notes,  to  demand  proof  that  the  bank  is  observing  the  rules,  by-laws, 
etc.,  to  approve  amendments  to  the  by-laws,  to  annul  resolutions 
contrary  to  the  by-laws,  to  decide  questions  arising  out  of  the  prepa- 
ration of  annual  account  of  the  bank,  and  to  proceed  against  the 


8  CESSION    OF    THE    DANISH    WEST   INDIES. 

bank  for  failure  to  live  up  to  its  obligations  under  the  law  of  March 
29,  1904,  and  the  by-laws.  The  by-laws  further  provide  that  in 
case  one-third  of  the  capital  stock  is  lost,  the  bank  may  relinquish 
the  right  to  issue  notes  upon  two  years'  notice  to  the  minister  of 
finance,  and  thereafter  to  pass  a  resolution  for  dissolution.  The  by- 
laws contain  numerous  other  details. 

The  specie  reserve  shall  consist  of  legal-tender  coin  of  the  islands, 
gold  in  bars,  and  foreign  gold  coin  and  bills  payable  on  demand  at 
the  National  Bank  of  Copenhagen.  Other  assets  or  security  may 
be  pawn  certificates,  bills  of  exchange,  debts  in  foreign  banks,  public 
interest-bearing  paper,  Danish  West  Indies  bill  of  credit,  and  bank's 
own  mortgage  bond. 

The  bank  shall  pay  an  annual  tax  to  the  Danish  Government  of 
10  per  cent  of  the  annual  surplus  of  the  bank,  for  which  payment 
bank  may  use  the  old  Danish  West  India  notes  of  1849  which  it  has 
redeemed.  As  long  as  the  tax  is  paid  in  such  bills  of  credit,  the  bank 
may  deduct  from  the  tax  a  sum  equal  to  the  interest  at  4  per  cent  on 
three-eighths  of  the  bills  of  credit  held  in  the  bank  from  the  date  of 
redemption  to  date  of  paying  this  tax.  Denmark  agrees,  in  a  com- 
munication of  July  18,  1916,  to  redeem  the  bills  of  credit  redeemed 
by  the  bank,  and  amounting  on  March  31,  1916,  to  442,610  francs. 
The  bank  shall  be  obliged  to  receive  free  of  charge  all  revenues  of 
the  islands  and  make  all  expenditures  in  the  islands  on  account  of 
the  Danish  treasury  or  the  colonial  treasury,  under  rules  to  be 
adopted  by  the  minister  of  finance;  shall  not  issue  notes  in  excess  of 
10,000,000  francs  under  certain  conditions;  shall  keep  a  specie  reserve 
amounting  to  30  per  cent  of  the  notes  in  circulation  in  the  bank's 
main  office,  and  the  remainder  in  the  National  Bank  at  Copenhagen. 
(Concession  and  by-laws  of  bank;  Danish  note  of  July  18,  1916.) 

(4i)  St.  Thomas  Harbor  loan,  1910. — Under  authority  of  the  law  of 
of  April  30,  1909,  No.  87,  the  Danish  Government  guaranteed  the 
payment  of  the  interest  and  redemption  of  a  loan  originally  amount- 
ing to  500,000  francs  (the  remainder  on  Mar.  31,  1914,  being  453,000 
francs)  known  as  the  St.  Thomas  Harbor  4  per  cent  loan  of  1910,  and 
made  by  the  harbor  council  for  the  purpose  of  deepening  the  harbor 
of  St.  Thomas.  The  harbor  council  authorized  the  ministry  of 
finance  to  conclude  the  loan  agreement,  which  it  did.  The  Danish 
West  India  Bank  agreed  to  furnish  the  loan  at  98  per  cent  to  be  repre- 
sented by  500  bonds  of  1,000  francs  each,  marked  with  the  Govern- 
ment guarantee  and  signed  by  the  harbor  council  as  debtor,  and 
exempt  from  stamp  tax.  The  loan  runs  2H  years  from  December  11, 
1910,  and  bears  7  per  cent  interest  and  redemption  per  annum,  of 
which  4  per  cent  shall  be  interest  and  the  remainder  redemption. 
(Letters  between  council  of  Danish  West  Indian  National  Bank  and 
ministry  of  finance,  Feb.  3,  Aug:  6,  Aug.  13,  1910:  copy  of  a  bond.) 

St.  Croix  Joint  Sugar  Boileries. — Under  the  law  of  February  25, 
1876,  the  Danish  Government  granted  a  loan  to  the  St.  Croix  Joint 
Sugar  Boileries  Corporation,  which,  in  the  Qovemment  account  for 
1899-1900,  amounted  to  1,414,784.57  kronen,  secured  by  first  mort- 
gage on  all  the  property  of  the  company  in  the  West  Indies,  including 
operating  equipment  and  inventory.  The  company  was  to  make  a 
yearly  payment  on  the  loan,  of  which  5  per  cent  per  year  of  the 
amount  due  was  to  be  interest  and  the  remainder  sinking  fund. 
The  interest  in  arrears  on  March  31,  1900,  was  878,436.67  kronen. 


CESSION    OF    THE    DANISH    WEST   INDIES.  9 

One  of  the  conditions  of  the  Danish  Government  granting  the  loan 
was  that  the  St.  Croix  colonial  treasury  should  guarantee  the  ful- 
fillment of  the  obligations  of  the  company  arising  from  the  loan, 
and  this  was  done  by  St.  Croix  order  No.  24  of  June  16,  1875,  "but 
it  never  became  effective."  (Ministry  of  finance,  Feb.  19,  1901.) 

The  St.  Croix  colonial  treasury  also  guaranteed  to  the  stockholders 
of  the  company  5  per  cent  per  annum  interest  on  their  stock.  The 
stockholders,  however,  have  never  received  any  interest  or  profit 
from  the  company,  and  the  guarantee 'has  never  been  made  effective, 
as  the  colonial  treasury  was  not  able  to  satisfy  it.  It  is  suggested 
that^this  guarantee  may  be  assumed  by  the  Danish  Government  in 
case  of  a  cession  of  the  islands.  The  amount  of  interest  due  under  this 
guarantee  was  $45,275.98  in  the  1899-1900  budget.  But  this  figure 
in  the  budget  is  explained  as  including  both  the  guarantee  of  St.  Croix 
to  the  Danish  Government  and  to  the  stockholders,  this  amount 
appearing  in  the  budgets  unchanged  since  1884-85,  but  never  being' 
paid.  (Minister  of  finance,  Feb.  19,  1901.) 

The  department  is  assured  by  the  Danish  Government  that  this 
matter  is  closed  by  the  law  of  April  24,  1903,  providing  for  a  means  of 
settlement  whereby  the  shareholders'  have  been  fully  satisfied  in  re- 
spect to  all  claims,  including  all  claims  against  the  St.  Thomas  colonial 
treasury  on  account  of  the  interest-guarantee  under  the  decree  of 
1876.  (Danish  memorandum  of  June  28,  1916.) 

(5)  This  provision  is  practically  the  same  as  that  in  Article  II  of 
the  unratified  treaty  of  1902.     Its  object  is  to  save  to  Denmark  the 
private  debts  due  her  by  individuals  at  the  date  of  cession.     In  order 
to  prevent  future  holdings  of  Danish  property  taken  over  for  debts 
of  private  persons,  a  provision  is  added  that  any  such  property  shall 
be  sold  within  two  years  and  the  proceeds  removed  from  the  islands, 
or  otherwise  the  United  States  will  sell  such  properties  on  behalf  of 
the  Danish  Government. 

(6)  This  provision  is  almost  exactly  the  same  as  that  in  Article  IV 
of  the  unratified  treaty  of  1902.     Thelast  budget,  for  March  31,  1916, 
provided  for  about  30,000  francs  for  such  pensions. 

ARTICLE    VI. 

This  article  is  taken  almost  bodily  from  Article  III  of  the  unratified 
treaty  of  1902,  the  only  important  differences  being  the  provision  that 
parents  or  guardians  of  children  under  18  years  of  age  may  make  their 
declarations  of  allegiance,  and  the  change  of  two  years  to  one  year 
within  which  the  election  of  allegiance  must  be  made. 

The  provision  in  the  second  sentence  is  the  result  of  a  compromise. 
The  Danish  Government  objected  to  its  subjects — the  native  in- 
habitants of  the  islands — being  placed  on  a  par  with  other  aliens. 
The  United  States  Government  could  not  guarantee  them  the  same 
rights  which  American  citizens  have,  in  advance  of  the  citizenship 
being  conferred  upon  the  inhabitants  of  the  islands  who  transfer 
their  allegiance  to  the  United  States.  Consequently  a  middle  ground 
was  sought  by  which  aliens  of  Danish  nationality  in  the  islands  will 
at  least  enjoj~  no  fewer  rights  and  privileges  than  at  the  present  tune. 
It  seems  that  an  effort  was  made  to  attain  a  similar  object  in  the 
treaty  of  1803  ceding  Louisiana  to  the  United  States.  In  this  con- 
nection, it  should  be  borne  in  mind  that  the  Danish  subjects  in  the 


10  CESSION    OF    THE    DANISH    WEST   INDIES. 

islands  have  had  no  voice  in  the  proposed  transfer  of  the  sovereignty 
of  the  islands  to  the  United  States,  and  that  many  inconveniences 
must  necessarily  result  to  them  if  they  retain  Danish  allegiance  after 
the  transfer. 

The  second  paragraph  of  this  article  is  the  usual  one  in  cessions  of 
territory  to  the  United  States.  It  is  exactly  the  same  as  the  corre- 
sponding provision  in  the  unratified  treaty  of  1902  and  similar  to  that 
in  the  treaty  with  Spain  of  1898. 

ARTICLE    VIII. 

This  article  provides  for  the  execution  of  judgments  already  ren- 
dered in  both  civil  and  criminal  cases  and  the  continuance  01  civil 
and  criminal  suits  still  pending  at  the  date  of  cession  before  the  courts 
in  the  islands  or  before  the  superior  courts  in  Denmark.  These  pro- 
visions are  substantially  the  same  as  those  of  Article  XII  of  the  treaty 
with  Spain  of  1898,  except  the  second  paragraph  of  section  1,  which 
seems  to  be  a  reasonable  addition. 

ARTICLE    IX. 

This  is  the  usual  provision  for  securing  the  rights  of  copyright  and 
patents  upon  change  of  sovereignty.  It  occurs  in  almost  exactly  this 
same  language  in  Article  XIII  of  the  treaty  with  Spain  of  1898. 
Without  such  a  provision  Danish  subjects  in  the  islands  might  be 
held  to  have  lost  whatever  rights  they  now  hold  in  patents  and  copy- 
rights under  Danish  laws. 

ARTICLE  x. 

The  treaties  extended  by  this  article  to  the  Danish  West  Indies  as 
a  part  of  American  territory  are: 

Convention  of  friendship,  commerce,  and  navigation  of  1826. 

Consular  convention  of  1861.  (Under  the  seaman's  act  this 
Government  has  given  notice  to  Denmark  that  the  articles  of  this 
treaty  in  conflict  with  that  act  will  be  abrogated.  Denmark  has 
accepted  this  condition  of  affairs.) 

Naturalization  convention  of  1872. 

Trade-marks  convention  of  1892. 

Extradition  treaties  of  1902  and  "1905. 

Peace  treaty  of  1914. 

The  following  cable  from  the  American  minister  at  Copenhagen 
was  sent  to  the  Committee  on  Foreign  Relations  by  the  Secretary  of 
State  after  the  receipt  of  the  foregoing  papers: 

COPENHAGEN,  August  24- 
SECRETARY  OF  STATE,  Washington: 

Am  informed  by  the  foreign,  minister  that  it  is  not  the  intention  of  the  Danish 
Government  that  the  United  States  shall  assume  the  responsibility  for  the  church 
funds  or  the  salaries  of  clergymen,  etc.;  the  clause  in  the  treaty  is  intended  merely 
to  safeguard  them.  It  is  not  expected  of  the  United  States  Government  that  it  shall 
act  as  trustee  for  any  ecclesiastical  funds.  Official  documents  will  be  sent.  There 
is  no  objection  to  an  exchange  of  notes  on  this  subject. 

(Signed)  EGAN,  American  Minister. 

o 


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